Module 2 Production Systems

Course:
Operations
Management and
Research
Course taught By: Dr. Arshia Kaul
Types of Processes to be covered
Project > Network Analysis (Module 11 – OR Technique)
Job-shop
Assembly Line Process
Continuous Flow Process
Module 2
PRODUCTION PROCESS
Session 5
MODULE 2 INTRODUCTION
• Discussion based on Pre-Read – Process Fundamentals
• Discussion based on Pre-Read- Introduction_process_analysis
Basic Components of Process
 Recall : Operations management is about designing, managing and improving the set of activities
that create products and services and deliver them to customers.
We call the activities, the people, the technology , the knowledge and the procedures that dictate
how work is organized the operating system.
The basic building block of the operating systems is the process.
Most operating systems consists of multiple processes.
A process takes inputs (raw materials, energy) and uses resources (labour, capital equipment,
knowledge) to create outputs that are of greater value to customers (and thereby of greater value to
the organization).
Process analysis is all about , a set of concepts and tools that will enable us to describe, measure,
diagnose and improve operating processes.
Process Flow Diagram: Components
The following are the representations in a process flow diagram:
Tasks (activities) : They are shown as small rectangles
Flows as arrows
Storage of goods as inverted triangles
The capacity is the maximum output rate.

Work-in Process(WIP) inventory is shown before packaging (Pack in the given process flow)
Finished Goods Inventory (FGI) after packaging.
Source: Process Fundamentals by Anne Gray and James Leonard , HBS (Not copied , only shown for explanation to class)
Process Flow Diagram/ Process Map
How will you make the following process
flow ?
If the mixers and proofers and ovens are not set up in parallel.
The product could flow from either mixer to either proofer and then either oven.
How would the process flow diagram look like ?
Components of Process
PROCESS BOUNDARIES INPUTS
A process transforms inputs into outputs. Inputs are items
It decides what is and what is not part of our that flow into a process from the environment to be
system. transformed into outputs.
The objective of the analysis drives the decision They include raw materials, components, energy, customers,
about what to include within the process parts, data and so on.
boundaries.
To analyse a process, we must measure inputs, such as
In the croissant making for example if we want to materials
needed to
and energy and determine the amount of each
make some amount of output.
analyse how the preparation of the raw materials
affects our production line, we should include the It is sometimes more useful to measure the input in dollars by
preparation of the dough and fillings within determining, how much it would cost to purchase these units.
our process boundaries. Alternatively, if the bake
and pack tasks are handled by a separate team and Thus in many analyses it will be necessary to consider the
are not within our control, we may decide to omit economic conditions influencing the cost of materials and
those tasks from the process boundaries. energy. Measuring the cost of inputs becomes more difficult
and requires additional care as the time horizon lengthens.
Components of Process Contd.
OUTPUTS TASKS AND STORAGE
The output of the process is either a good or a service Tasks are typically value-adding activities performed by
The products in the process flow diagram is shown as finished goods resources like labour and capital to convert the inputs
inventory. into something more nearly like the desired output.
In some systems, the finished goods inventory does not exist at all, the
process produces the output directly for distribution. Some examples of output : (1) operating a drill press to
change a piece of metal. (2) inspecting a part to make
In some cases the finished goods inventory is maintained separately from sure it meets some standard (3) flying an airplane (4)
those of the operating system.
anesthetizing a patient before the operation
Although it is a simple matter to count the number of loaves of bread
produced daily by the bakery, or to count the number of patients served
by a hospital each year, it is not simple to place value on a given output.
Storage : Holding of inventory
An economic point of view could be used for measurement of the value. Storage occurs when no task is not being performed
Thus understanding of the economic point of view is very important. and the good or service is not being transported.
Main characteristics of the output that could be considered : cost of
providing the output, the quality of the output and the timeliness of They are represented in the process flow diagram by
the output.
an inverted triangle.
Components of Process Contd.
RESOURCES FLOWS
Flows can be categorised into the flow of goods and the
Resources are often categorised into labour (eg. flow of information.
Worker time) and capital(fixed assets, machines,
buildings).
Flows are of two types : (i) Physical flow (ii)
Performing a task may require multiple resources Information
(eg. Machine and a worker operating the
machine), and resources are sometimes shared Depicted below :
across several tasks.
The ability of the resources to be shared is based
on the degree of specialization.
For examples, compared to more flexible
workers, specialized workers can often perform
certain tasks particularly well (eg. in terms of
quality or productivity), but are less able to be
allocated across multiple tasks.
Measuring Performance of Process
CAPACITY EFFICIENCY
Is defined as the maximum possible output rate from a process
and is measured in units of output per unit time , such as tons It is a common metric used to assess the performance of
per day, parts per minute or customers per hour. physical processes.
For example, a steel mill can produce some number of tons of Efficiency indicates the amount (or value) of inputs in a
steel per year, an insurance office can process some number of process requires to generate a particular amount (or value)
claims per hour. of output .
Capacity is easy to define but difficult to measure. Efficiency is typically measured as the ratio of output to
input and is often expressed as a dimensionless percentage
Theoretical capacity of the process is the most output that it because both outputs and inputs are usually measured in
could generate under ideal conditions over some period of time. the same units.
It is the upper bound for the process.
For example, the efficiency of an engine is typically
Effective capacity of a process which refers to maximum output expressed as a ratio of output energy to input energy.
rate during a given period of time considering a set of
constraints under which the process typically operates (such as
raw material delivery schedule, worker breaks, quality yields ) but
measuring this requires knowing a great deal about the process.
PRODUCTIVITY PROFITABILITY
Related concept that measures the amount of Is an efficiency measure that measures the
output produced per unit of input. amount of economic value generated from a set
of resources.
For productivity measures, the output and input
can be measured in different unit. Among the many ways to measure profitability,
gross profit margin is expressed as a percentage
For example, a labour productivity metric might and is calculated by subtracting all direct
measure output in terms of quantity or value expenses incurred in production (raw materials,
produced but measure input in terms of hours labour etc.) from sales
of labour.
UTILIZATION CAPACITY UTILIZATION
Is another common efficiency measure . Capacity utilization is a measure of how much
output was actually achieved relative to capacity
Utilization is the ratio of (i) input or resource (how much output could have been achieved in
the process actually used to create the output to an ideal situation).
(ii) the amount of that input or resource
available for use
Flexibility is another characteristic that should often be considered when analysing a process.
The flexibility of a process refers to its ability to produce a range of product models in quantities
desired by customers.
Product variety can be produced by processes designed either (a) with flexible resources that can
produce a combination of outputs simultaneously or (b) to be changed over to quickly transition
from producing one product model to another by using different tasks, resources and/or inputs.
PRODUCT QUALITY PROCESS QUALITY
Quality can be defined in different ways. Process refers to the ability of the process to
Product Quality can be evaluated using external or consistently produce products or services within
internal measures. their design specifications.
External quality measures generally assess how well the
product design satisfies the wants and needs of In order to produce them within these
customers, especially compared to competing products specifications, the process must be operating
available in the marketplace.
within certain tolerances.
Product performance, features, reliability, durability,
serviceability and design aesthetics may all be Process measures such as the temperature
components of product quality.
inside the kiln or amount of force applied by a
Internal measures of product quality, generally compare punch press, are generally used in assessing
whether individual units meet product design
specifications or performance standards. process quality.
CYCLE TIME BOTTLENECK
The cycle time is the average time between The bottle neck of a process is the task or resource that
completion of successive units, and can be limits time.
production, which is one with the longest cycle
defined for an individual task or resource or for
portions of a larger process. Just as the neck of the bottle limits the rate at which the
liquid inside can be poured, a process’s bottleneck limits
how quickly products can move through the process, and
Cycle time answers the question “How often thus determines the process cycle time.
does a unit complete a task or the process? Or
“How often does a resource compete a unit?” Bottleneck may shift depending on what products are
being produced or what labour equipment is available at
any point in time.
Because the bottleneck paces and limits its capacity, it is
an important point for management focus.
IDLE TIME TAKT TIME
Idle time refers to the time when useful work is not Takt time is the cycle time at which a process
being performed. would need to be paced in order to meet customer
Both workers are machines can have idle time.
demand.
Time spent waiting to receive or deliver a unit is idle Takt time can be calculated by taking the time
time unless there is some other useful task to be available to produce a certain product and dividing
performed in the interim. by customer demand for the product.
Idle time can be present in an even balanced process as For eg. If an automobile assembly line is available
well. for 16 hours (960 minutes) per dday and customer
demand is 1,000 cars per day, the takt time is 0.96
For eg. A worker in the packaging department, for minutes per car.
example, may merely load 20 loaves of bread on a
machine and then stand by for a while. This time maybe The process to fully meet the demand , it must be
idle for the worker (unless he or she is needed to monitor designed so that the process cycle time is no more
the equipment’s performance. than 0.96 minutes.
THROUGHPUT TIME BATCH SIZE(LOT SIZE)
Throughput time is defined as the time it takes Most processes produce more than one product type.
for a specific job or order to go through the Suppose a process produced three products : P1, P2 and
entire process. In manufacturing settings , P3. The process could produce 1 unit of P1 , then 1 unit
of P2 , then 1 unit of P3 , then 1 unit of P1 and so on
throughput time is also known as manufacturing until 100 of each are produced.
lead time. Throughput time is measured in units Alternatively the process could produce 100 units of P1
of time (eg. Seconds, minutes and so forth). before beginning production on 100 units of P2.
In first case, batch size is 1 and in he second case the
batch size is 100 units.
If time must be expended from setting up the
equipment to make the transition from producing P1 to
producing P2, then these two batch sizes will result in
quite different throughput time and cycle time.
DIRECT LABOUR CONTENT DIRECT LABOUR UTILIZATION
Direct labour content is the actual amount of work Direct labour utilization is often the key
contained in the product.
efficiency metric in labour-intensive processes
Eg. Say in the batch of 100 loaves of bread ,while and measures the percentage of time that
packaging equipment has cycle time of ¾ hour , the
packaging operator takes 40 minutes on activities such as workers are actually working on a product or
loading of bread onto machines ,setting up the right bags performing a service:
on each machine and making necessary machine
adjustments.
Direct labour utilization =
The direct labour content of packaging would be 𝐷𝑖𝑟𝑒𝑐𝑡 𝑙𝑎𝑏𝑜𝑢𝑟 𝑐𝑜𝑛𝑡𝑒𝑛𝑡
40/100 loaves or 0.4 minutes/loaf. 𝑡𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑙𝑎𝑏𝑜𝑢𝑟 𝑡𝑖𝑚𝑒
The direct labour content of the bread, the direct labour
content of the bread-making would need to be included.
Indirect labour hours(maintenance, materials handling
and management etc.) are not included.
Measuring Performance of Process:
Example
 Take the example of a Hawaiian shirt production Step 4 (pack and ship): The pack and ship worker
process. This process includes the following four steps: takes the next available tote and places the completed
shirt in a plastic bag. The bag is then packaged in a
Step 1: (cutting) A roll of fabric (with the desired shirt standard size shipping box along with a customer receipt
pattern) is gathered and laid out on the cutting table. and return slip, both of which are printed out at the pack-
Then the necessary pieces of shirt (one torso, two and ship station. The box is sealed with packaging tape,
sleeves, one collar and one shirt-pocket) are cut using and a shipping label is attached to the outside. Completed
semi-automatic fabric cutter. The cut pieces of the shirt boxes are staged at the shipping door for pickup by a
are placed in a tote and staged before step 2. parcel carrier.
Step 2 (sewing base): When ready, the sewing machine For simplicity assume that there is only one worker at
is operator at step 2 takes the next available tote and each step of the process. Figure illustrates a high-level
stitches the two sleeves and the pocket to the torso. The process map of the four-step process.
base shirt is then placed back into the tote (along with the
remaining raw material) and staged before step 3.
Step 3 (sewing extras): The sewing machine operator
at step 3 takes the next available tote and stitches the
collar, two company logo patches (one for the back of
the collar and one for the left short sleeve, and six
buttons to the base shirt.
Source: Operations Management: An introduction to Process Analysis, Darden Business Publishing (University of Virginia Darden School Foundation (Not copied ,
only shown for explanation to class)
Measuring Performance of Process: Calculating
Capacity and Identifying Bottlenecks
First question that we would want to address in a process is … How much can the existing process
produce? Or How many customers can the existing process service?
For analysis, we will assume a steady state regarding the workload of the process. No ramp up in
the work.
The assumption is that a worker can arrive at his or her station and immediately continue working
on whatever unit he or she was working on end of the previous day. This is a valid assumption for
many production settings (eg. Unfinished cars on a production line remain on the line overnight to
be completed the next day )
Suppose that time studies are performed on the Hawaiian-shirt process with the following minutes-
per-shirt values found for each step.
Step Description Run Time

Minutes/Shirt
1 Cutting 12.5
2 Sewing (base) 10
3 Sewing (extras) 15
4 Pack/ship 5
Assuming that there is 1 worker per step and that the operation runs 8 hours per day , 5 days per
week. . Capacity for step 1 is
5 𝑑𝑎𝑦𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘 ∗ 8 ℎ𝑜𝑢𝑟𝑠 𝑝𝑒𝑟 𝑑𝑎𝑦 ∗ 60 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 ℎ𝑜𝑢𝑟 2400 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘
𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 = =
12.5 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡 12.5 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡
= 192 𝑠ℎ𝑖𝑟𝑡𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘
Applying same logic the capacity for each step can be calculated. Check what answers you are
getting
Step Description Run Time Capacity
Minutes/Shirt Shirts/Week
Note : Capacity is an 1 Cutting 12.5 192

indicative average, 2 Sewing (base) 10 240
production could be more 3 Sewing (extras) 15 160
or less than this 4 Pack/ship 5 480
𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑡𝑖𝑚𝑒 How will you increase
𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 =
𝑇𝑖𝑚𝑒 𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑡𝑜 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑎 𝑢𝑛𝑖𝑡 (𝑜𝑟 𝑏𝑎𝑡𝑐ℎ) the capacity of the
process ?
Once capacity of each step is calculated for each process, we can determine the capacity of the
overall process. To do this , first the bottleneck must be identified.
At the current situation step three is considered as the bottleneck as it is the slowest process and
has minimum capacity.
Capacity with shared resources
Consider the case, when single sewing machine is shared between step 2 and step 3.
Although each step would have the same capacity as before , the single sewing machine would have
a much lower capacity than either of the steps.
A single sewing machine, available for 5 days a week , 8 hours a day can perform step 2 and 3 in 25
minutes per shirt resulting in a capacity of :
5 𝑑𝑎𝑦𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘 ∗ 8 ℎ𝑜𝑢𝑟𝑠 𝑝𝑒𝑟 𝑑𝑎𝑦 ∗ 60 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 ℎ𝑜𝑢𝑟 2400 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘
𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 = =
10 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡 + 15 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡 25 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡
In this case the shared resource becomes the bottleneck and new capacity of system is 96 shirts per
week.
Calculating Capacity Utililization
Capacity utilization is the ratio of the amount of resource used (eg. Demand) to the amount of available
(eg. Capacity) in that time period.
Capacity utilization provides us with a measure of how much of the capacity of an operation is used.
Suppose that the Hawaiian-shirt has an operating capacity (i.e. producing 160 shirts per week) . Recall,
however that Step 1 can operate at a capacity of 192 shirts per week. This implies that the average capacity
utilization at step 1 is as follows:
160 𝑠ℎ𝑖𝑟𝑡𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘
𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑈𝑡𝑖𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 = = 83.3%
On similar basis, the capacity utilization for Step 2 is 66.66%, step 3 is 100% (i.e. the bottle neck step)
and step 4 is 33.3%.
Calculating capacity of the system provides a good way to examine where there may be slack in the
system.
Capacity is a rate and always measured is units per time. In practical sense, when managing a process it
may help to measure the process in time per unit instead.
Calculating Cycle time
The average amount of time that elapses between completing successive items at a stage, assuming that a process is
operating at a capacity. The cycle time at a process is defined as the inverse of the capacity at that step.
For example, consider step 1 again. The cycle time can be calculated as follows:
1
𝐶𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 =
𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦
1
=
1 𝑤𝑒𝑒𝑘𝑠
=
192 𝑠ℎ𝑖𝑟𝑡𝑠
5 ∗ 8 ∗ 60 𝑚𝑖𝑛𝑢𝑡𝑒𝑠 𝑖𝑛 𝑎 𝑤𝑒𝑒𝑘
=
192 𝑠ℎ𝑖𝑟𝑡𝑠
= 12.5 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡
Note, if we were to calculate the cycle times for steps 2 through 4, the cycle time will come same as the run time of
original Hawaiian-shirt process. This is because we have not included the setup time at any of the individual
step.
Cycle time for the overall process will be 15 minutes per shirt (i.e. the cycle time of the bottleneck step).
Calculating Cycle time
Cycle time provides us with various different ways to think about capacity and a different way to
visualize the process.
For example, a car assembly line that operates non-stop on an 8-hour shift and produces 480 cars
per shift, the cycle time is 1/480 shifts per car or 1 min. per car( an 8-hour shift lasts an 8 hr./day
x60 min./hr=480 min./day. , thus 480 min./day to produce 480 cars /day gives a cycle time of 1
min. per car)
Thus if we were to stand at the end of the production line, we should see, on an average , a fully
assembled car come off the line every minute.
Because cycle time is inverse of the capacity , if the cycle time is known then the capacity can be
calculated and vice versa. Having said this, we do not need to calculate cycle time to calculate the
capacity of the process.
Cycle time provides an alternative way to think about capacity.
Calculating Capacity with 2 sewers
Revisiting the process design , the question may arise , why steps 2 and 3 have to performed
sequentially, with two sewers splitting the tasks for sewing a shirt.
The steps could be combined. To determine the capacity for this alternative process configuration ,
we assume that a single worker can sew a shirt in 25 mins./shirt (adding the run times for steps 2 and
steps 3).
We then calculate the capacity for the combined steps 2 and 3 (with two servers) as follows:
2 𝑠𝑒𝑤𝑒𝑟𝑠 ∗ (5 𝑑𝑎𝑦𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘 𝑝𝑒𝑟 𝑠𝑒𝑤𝑒𝑟 ∗ 8 ℎ𝑟𝑠. 𝑝𝑒𝑟 𝑑𝑎𝑦 ∗ 60 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 ℎ𝑜𝑢𝑟
25 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡
4800 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘
=
25 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡
Calculating Capacity with 2 sewers
The numerator captures that two sewers are available for 2*2400 minutes/week to sew complete
shirts.
Observe that the capacity of 192 shirts/week for the combined steps 2 and 3 is higher than our
previously calculated capacity of 160 shirts per week for step 3 (bottleneck step).
By combining steps 2 and 3, we eliminate idle time that the sewer at step 2 incurs in the original
process configuration (since he or she can only process as fast as the rate of step 3 ).
The overall capacity for the new process configuration is 192 shirts / week, which is equal to
capacity of both step 1 and the new combined steps 2 and 3.
An important question to answer is why do we split the steps between sewers? Why not always have
the workers in a process perform all the steps. Making the entire sandwich or a shirt completely.
Calculating Takt time
Till now we have considered the calculation for finding out how many shirts per week. Now we will
try and see how we can increase the capacity of the process.
One way to potentially increase the capacity of the process is to shift tasks away from the
bottleneck.
Now we see how load-balancing and operator loading charts can be used to increase the capacity
To load balance , the steps of the process, we first need to determine the limit to constrain
how much time per shirt we can spend at each step in the process.
Given a time frame and a target number of units to produce (per unit of time) , we can divide the
former by the latter and get the maximum time available to make a single unit and still meet the
target production quantity. We refer to this value as takt time, coming from the German word for
“pace” or “rhythm”.
𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑡𝑖𝑚𝑒 𝑎𝑣𝑎𝑖𝑎𝑙𝑏𝑙𝑒
𝑇𝑎𝑘𝑡 𝑡𝑖𝑚𝑒 =
𝑈𝑛𝑖𝑡𝑠 𝑑𝑒𝑚𝑎𝑛𝑑𝑒𝑑 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 𝑡𝑖𝑚𝑒
Difference between Takt time & Cycle
Time
The difference between takt and cycle time is follows:
Takt time refers to the target time per unit as derived from customer demand.
Cycle time refers to actual time per unit that can be achieved from the production floor.
If cycle time for any step exceeds the takt time, then the demand cannot be fully met and cycle time must be
reduced. Otherwise, the step will not be able to keep pace with demand.
Say the demand for shirts is 172 shirts per week. The Hawaiian-shirt production process for 8 hours a day , 5
days a week, which means there is a total of 2,400 minutes per week to meet demand.
𝑇𝑎𝑘𝑡 𝑡𝑖𝑚𝑒 = = 13.96 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡
Note, for the process to meet demand no step can have a cycle time greater than 13.96 minutes per shirt.
Another way to put it , at the end of the production line, we need to see a shirt come off the line every 13.96
minute s (or less) on an average to ensure that the process is fully meeting the demand.
Further on Takt time & Cycle Time
Step 3 is not only the bottleneck but its cycle tie also exceeds the takt time. Therefore meeting the
demand of 172 shirts per week is not possible with the current process configuration.
To increase the capacity of the process, we could either increase the time available at the
sewing(extras) step by either adding a second sewing machine and operator or by increasing the
number of hours the current sewer works.
The second option is to reduce the time required to process a unit at each step by either (i)
eliminating unnecessary tasks (ii) improving the time for specific tasks or (iii) rebalancing tasks
between steps.
Operator-loading chart
ORIGINAL OPERATOR LOADING CHART BALANCED OPERATOR LOADING CHART
Operator-loading chart
We can further verify that the updated process can now meet the demand by recalculating the capacity.
The capacity at step 2 reduces to 200 shirts per week ( from 240 shirts per week)
Capacity of step 3 increase to 184.6 which is approximately 185 shirts per week( from 160 shirts per
week).
Although the capacity of step 2 has reduced , this is secondary since (i) step 2 is not the bottleneck (ii)
overall process capacity has increased from 160 shirts per week to 185 shirts per week.
There are also alternate ways to rebalance. For, example if we were to switch the task of sewing the
sleeve logo (3 mins.) to step 2 , this shifts the bottleneck to step 2 but results in the same overall process
capacity. Realistically it may make sense to move this step to step 2 as the sewer is already attaching the
sleeves to torso in step 2.
Operator loading charts can be used not only to examine ways to rebalance tasks between steps, but also
to look for ways to reduce the number of resources required in a process. They also help us to visualize
the bottlenecks. Design of the process can be revisited.
Batches
So far it is assumed that the Hawaiian shirts are being processed at each step one at a time.
The potential setup time required for the steps in the process are ignored.
Batch: A group of items or orders that is processed all at one time. The batch size is then the number of
items or orders that are processed as a batch.
We assume here that Hawaiian shirts are processed in batches of 5 shirts per batch. This means that a
batch of 5 shirts transverse the process together in a tote, with each shirt being processed at a step before
the tote (and all 5 shirts ) moves to the next step.
Successive batches are different from one another. For example, here the shirts may be of different fabric
in different batches.
We assume that the shirts are processed as batches throughout the process and the run times remains the
same.
Sometimes items may be batched together only in a certain stages of a process. Also cases occur when the
task for successive items in a batch easier due to repetition.
Set up time
Set up time is the amount of time it takes to set up or prepare before processing an item or batch
of items of a process way.
Set up time includes the tasks such a calibrating the settings on a sewing machine, setting up a large-
scale printer for a new publication run etc.
Setup time is also called changeover time , since it is the time that incurred in order to change from
working on one type of product or service to another.
Set up time is no-value added time because products are not produced or customers are not
serviced while the setup occurs.
Till now we ignored set up times , but there may be some steps which require preparation time. For
instance, the cut pieces require to be set up before sewing.
Incorporating Set up time and Batches in
Calculating Capacity
In the Hawaiian shirt case assume that there is a setup time of 22 minutes per batch for step 1.
This setup time to select an lay out the fabric as well as calibrate the necessary tools for cutting.
Based on the new batch size and setup time, we recalculate the capacity of step 1 as follows:
5 𝑑𝑎𝑦𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘 ∗ 8 ℎ𝑜𝑢𝑟𝑠 𝑝𝑒𝑟 𝑑𝑎𝑦 ∗ 0 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 ℎ𝑜𝑢𝑟
22 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑏𝑎𝑡𝑐ℎ + 5 𝑠ℎ𝑖𝑟𝑡𝑠 𝑝𝑒𝑟 𝑏𝑎𝑡𝑐ℎ ∗ 12.5 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡

=
84.5 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑏𝑎𝑡𝑐ℎ
= 28.4 𝑏𝑎𝑡𝑐ℎ𝑒𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘
The cycle time for a batch of five shirts at step 1 is 84.5 minutes per batch, which includes 62.5
minutes per batch of run time and 22 minutes per batch of setup time .
Converting the batch per week to shirts per week.
= 28.4 𝑏𝑎𝑡𝑐ℎ𝑒𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘*5 shirts per batch = 142 shirts per week
only
Source:
shownOperations
for explanation
Management:
to class) An introduction to Process Analysis, Darden Business Publishing (University of Virginia Darden School Foundation (Not copied ,
Incorporating Set up time and Batches in
Calculating Capacity
Why did the capacity decrease ? ...
This happened because now more time is required for each step as we are incorporating the setup
time.
Updated cycle time in mins. per shirt is
1
𝐶𝑦𝑐𝑙𝑒 𝑡𝑖𝑚𝑒 =
𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦
1
= × 2400 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘
= 16.9 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡

Updated capacity and cycle time for each step
Incorporating Set up time and Batches
Step Description Run Time Set up time Capacity Cycle Time
Minutes/Shirt Min./batch Shirts/Week Mins./shirt
1 Cutting 12.5 22 142 16.9
2 Sewing (base) 12 0 200 12
3 Sewing (extras) 13 0 185 13
4 Pack/ship 5 0 480 5
Updated capacity and cycle time for each step
Incorporating Set up time and Batches
Bottle neck of the process has now shifted from step 3 to 1.
Also notice that run time and cycle time of step 1 are not same.
Recall cycle time is inverse of capacity.
Capacity incorporates setup time for each batch m the cycle time has increased.
Run time is not always same as cycle time.
The choice of batch size can have a large impact on the capacity of a process.
How does changing the batch size effect the shirt process?
Little’s Law : (without batch size and set
up time) : Throughput rate
Till now we have addressed how much the process will There is a natural relationship between capacity and
throughput rate.
produce?
In the hawaiian shirt example, capacity was calculated to be
We have not addressed that how responsive the process 185 shirts per week (assuming that there are no batches or
is... setup times , and steps 2 and 3 are balanced ).
This represents the maximum number of shirts that can be
Identifying and reducing how long it takes an item or a produced per week, however this is not necessarily how much
customer to pass through a process leads to a better we will produce .
customer service and thus directly impacts revenues by We may not (and likely will not) operate at capacity all the
either increasing the market share or allowing a firm to time.
change a premium for the better service provided.
Depending on demand , we may produce fewer than 185
Throughput rate: The rate at which units flow through a shirts per week.
process. It represents the actual rate at which a process or The actual rate of production is the throughput rate.
system generates its products or serves its customers. The
Capacity represents a ceiling or upper limit for throughput
unit of measure for throughput rate is units per week or rate.
cars per month).
The aim is to align the throughput rate with demand to
ensure that the customer needs are met and to prevent us from
overproducing.
Little’s Law : (without batch size and set
up time) :Throughput time
Throughput time is defined as the time it takes for a specific job or order to go through the entire
process. In manufacturing settings , throughput time is also known as manufacturing lead time.
Throughput time is measured in units of time (eg. Seconds, minutes and so forth).
To visualize throughput time , imagine we were at step 1 in the Hawaiian-shirt process, and we started a
stopwatch when the next shirt began processing.
If we followed that shirt throughout the process and stopped the stopwatch when it completed at step 4,
we would find that the time it took the shirt to traverse the entire process are drawn.
The starting and stopping of the stopwatch depends on the boundaries we set.
How much time on an average it takes to produce a specific item is given by throughput time.
It gives the sense of how responsive is the system to customer demand.
Throughput time cannot be found by simply adding cycle times or run times as it does not capture the
waiting time that often occurs in a system due to inventory buildup or overall throughput rate of the
process.
Little’s Law :
For a system in equilibrium , Little’s Law governs the relationship between the average rate of flow through a system
(i.e. average throughput rate), average amount of inventory in the system and the average amount of time that a unit
spends in the system (average throughput time). For a system with defined boundaries that is in equilibrium, let,
I= is the average amount of inventory (i.e. the average number of units ) within the system
R =Average throughput rate through the system
T= Average throughput time for a unit to pass through the system
Little’s Law states that the relationship among I, R and T is given as follows:
I=R x T
Session 6
MODULE 2 CONTD.
• Distinguish between various Designs of production Systems
• Product Design
• Process Design
• Production Design
D I S T I N G U I S H B E T W E E N T H E V A R I O U S P R O C E S S E S ( I ) P R O J E C T > N E T W O R K A N A L Y S I S ( M O D U L E 1 1
– OR TE CHNIQUE ) (II)J OB -SHOP (III)ASSE MBLY L INE PROCE SS (IV) CONTINUOUS FL OW PROCE SS
Product Design
Product Design
Product Design: one way for manufacturers to satisfy customers and gain a differential advantage
is through product design which refers to the arrangement of elements that collectively form a good
service.
It is concerned with the form and function of a product. Form design involves the determination of what
the product would look like i.e. the shape and appearance of the product , what it will be made of (product
structure) and how it will be made (process design). Functional design deals with what the product will
perform and how it performs.
Functional design is concerned with the first and foremost requirement of a good product i.e. the product
should effectively perform the function for which it is developed. For example, for a television set, the
picture quality (video) and sound quality (audio) is more important than the appearance of the cabinet in
which the picture tube is fixed.
Form design : is concerned with the appearance and aesthetic considerations and also the size, volume and
weight of the product which are secondary to the performance of the product.
Product Design Contd.
IMPORTANCE OF PRODUCT DESIGN WHAT DOES PRODUCT DESIGN DO?
The production strategy is directly affected by  The activities responsible of product design include
product design for the following reasons: the following :
As products are designed, all the detailed  Translating customer needs and wants into product and service
characteristics of each product are established. requirements (marketing)
Each product characteristic directly affects how the  Refining existing products (marketing)
product can be made or produced. (i.e., process
technology and process design) and  Developing new products (marketing, product design and
production)
How the product is made determines the design of
the production system (production design) which is  Formulating quality goals (quality assurance , production)
the heart of production and operations strategy.
 Formulating cost targets (accounting)
Affects marketability
 Constructing and testing prototype (marketing, production)
An excellent design includes usability, aesthetics,
reliability , innovation and appropriateness.  Documenting specifications (product design)
REASONS FOR PRODUCT DESIGN OR
OBJECTIVES OF PRODUCT DESIGN
REDESIGN
To remain competitive in the market The overall objective is profit generation in the long
run.
Make business grow and increase profits
To achieve the desired product quality
When productivity gains result in reduction of
workforce, developing new products can mean adding To reduce the development time and cost to the
jobs and retaining surplus workforce instead of minimum.
downsizing.
To reduce the cost of the product
Sometimes it is redesigning to include customer
complaints, accidents or injuries during product use , To ensure producibility or manufacturability
excessive warranty claims or low demand. Sometimes (designing for manufacturing and assembly).
redesign is initiated to achieve cost reductions in
labour and material costs.
FACTORS AFFECTING PRODUCT FACTORS AFFECTING PRODUCT
DESIGN DESIGN
Customer Requirements Cost/Price Ratio
Convenience of the operator or user Product Quality
Trade off between function and form Process Capability
Types of materials used Effects on existing product
Work methods and equipments Packaging
CHARACTERISTICS OF A GOOD CHARACTERISTICS OF A GOOD
PRODUCT DESIGN PRODUCT DESIGN
Function or performance Standardization
Appearance or aesthetics Specification
Reliability Safety
Maintainability
Availability
Producibility
Simplification
Approaches to Product Design
Designing for the customer
Designing for Manufacturer and Assembly
Designing for ease of Production
Designing for Quality
Designing for Ergonomics
Designing for Environmental Protection
Designing for Recycling
Designing for Disassembly
Designing for Customization
Others : (i) Computer aided design (ii) value engineering
Legal, Ethical and Environmental Issues
in Product Design
Any aspect of the product which may cause potential harm to the environment must be considered
seriously to avoid such issues.
The government regulations regarding pollution control, environment protection, consumer safety
etc. must be considered by product designers while designing the products. Eg. The automobile
design should take into account emission levels and safety features such as seat belts.
Another reason for design improvement is product liability which means a manufacturer is liable for
any injuries or damages caused by a faulty product because of poor design and workmanship.
Ethical issues often rise in the design of products and services. Managers must be aware of these
issues and designers must adhere to ethical standards. Ethical considerations while designing the
products may result in trade-off decisions.
Eg. It is unethical to release a software to the market without removing most of the bugs involved.
Process
WHAT IS A PROCESS? TYPES OF PROCESSES
A process is a sequence of activities that is intended to Conversion Processes: Converting raw
achieve some result, typically create added value for materials into finished products for example
customers.
iron ore to iron and then steel . These could be
A process converts inputs into outputs in a production metallurgical, chemical, manufacturing or
system. It involves the use of organization’s resources to
provide something of value. No product can be made construction processes.
and no service can be provided without a process and no
process can exist without a product or service. Manufacturing Processes: Can be categorised
Processes underlie all work activities and are found in all as (i) forming processes (ii) machining processes
organizations. Deciding which process to use is an
essential issue in the design of a production system. (iii) assembly processes
Process decisions involve many different choices is Testing processes: Which involve inspection
selecting human resources, equipment and machinery
and materials. and testing of products (sometimes considered
as part of manufacturing processes.
Process decisions are strategic and can effect the
organization’s ability in the long run.
Process Contd.
TYPES OF MANUFACTURING PROCESSES
Forming Process: include foundry processes (to produce castings) and other processes such as
forging, stamping, embossing and spinning. These processes change the shape of the raw material (a
metal) into the shape of the workpiece without removing or adding material.
Machinig Process: comprise metal removal operations such as turning, milling, drilling. Grinding,
shaping, planning, boring etc.
Assembly Processes: Involves joining of parts or components to produce assemblies having
specific functions. Examples of assembly processes are welding, brazing, soldering, riveting,
fastening with bolts and nuts and joining using adhesives.
What is a Process Planning?
It consists of (i) process design (ii) operations
design
OPERATIONS DESIGN
PROCESS DESIGN
Operations Design: is concerned with the
Process Design: is concerned with the overall design of the individual manufacturing
sequences of operations required to achieve the operation. It examines the man-machine
product specifications. It specifies the type of relationship in the manufacturing process.
work stations to be used, the machines and Operations design must specify how much
equipments necessary to carry out the labour and machine time is required to produce
operations. The sequence of operations are each unit of the product.
determined by (a) the nature of the product
(b) the materials used (c) the quantities to be
produced and (d) the existing physical layout
of the plant
Framework of Process Design
The process design in concerned with the following:
1. Characteristics of the product or service offered to the customers.
2. Expected volume of output
3. Kinds of equipments and machines available in the firm
4. Whether equipments and machines should be of special purpose or general purpose
5. Cost of equipments and machines needed
6. Kind of labour skills available, amount of labour available and their wage rates
7. Expenditure to be incurred for manufacturing processes
8. Whether the process should be capital-intensive or labour-intensive.
9. Whether the process should be capital-intensive or labour-intensive.
10. Make or buy decision
11. Method of handling materials economically.
Case : Bangalore International Airport
Project
Identify the characteristic of the process in the case.
Can you identify the activities and represent it in the form of a network diagram?
Case : Continuous Process : Bottling Plant
Identify the characteristic of the process in the case
Bottling Plant
Case : Batch to Continuous Process :
Medicine Industry
Case : medical industry
Case : Honda Case: Mixed Assembly Line
Process Selection
Process Selection refers to the way production of goods or services is organized.
It is the basis for decisions regarding capacity planning, facilities (or plant) layout, equipments and
design of work systems,
Process Selection is necessary when a firm takes up production of new production of new
products or services to be offered to the customers.
Three primary questions to be addressed before deciding on process selection are :
How much variety of products or services will the system need to handle?
What degree of equipment flexibility will be needed ?
What is the expected volume of output?
Process Strategy
A Process strategy is an organization’s approach to process selection for the purpose of
transforming the resource inputs into goods and services(outputs).
The objective of a process strategy is to find a way to produce goods and services that meet
customer requirement and product specification (i.e. design specifications) within the constraints of
cost and other managerial limitations.
The process selected will have a long-term effect on efficiency and production as well as flexibility ,
cost and quality of the goods produced. Hence it is necessary that a firm has a sound process
strategy at the time of selecting the process.
Key aspects in process strategy include:
Make or Buy decisions
Capital intensity
Process Flexibility
Process Strategy Contd.
Make or Buy decisions : refer to the extent to which a firm will produce goods or provide
service in-house or go for outsourcing (buying or sub-contracting) ,
Capital intensity : Refers to the mix of equipment and labour which will be used by the firm.
Process Flexibility : Refers to the degree to which the system can be adjusted to changes in
processing requirements due to such factors as changes in product or service design, changes in
volume of products produced and changes in technology.
Three Process strategies : Virtually every good or service is made by using some variation of
one of three process strategies. They are
(i) Process focus : Majority of global production is devoted to low volume , high variety
products in manufacturing facilities called job shops. They are for example : welding , grinding,
painting carried out in departments devoted to these processes. Such facilities are process
focussed in terms of equipment, machines layout and supervision. They provide high degree
of product flexibility as products move intermittently between processes. Each process is
designed to perform a wide variety of activities and handle frequent changes. Such processes are
called intermittent processes. These facilities high variable costs and low utilisation of facilities.
(ii) Repetitive focus : This is a product oriented production process that uses modules. It
falls between product focus and process focus. Its uses modules which are parts or
components prepared often in a continuous or mass production process. A good example is
the Assembly Line which is used for assembling automobiles and household appliances and is less
flexible than process-focused facility. Personal computer is an example of a repetitive process
using modules in which the modules are assembled to get a custom product with desired
configuration.
(iii) Product focus : It is a facility organized around products, a product oriented, high-volume
low-variety process. It is referred to as continuous process because it has very long continuous
production run. Examples of product focussed processes are steel, glass, paper , electric bulbs ,
chemicals and pharmaceutical products, bolts etc. Product-focussed facilities need
standardization and effective control. The specialised nature of the facility requires high fixed cost ,
but low variable costs reward high facility utilization.
Process Management
Process Management is concerned with the selection of inputs, operations, work flows and methods that
transform inputs into outputs.
The starting point of input selection is the make-or buy decision i.e. deciding parts and components are
to be produced in-house and which are to be purchased from outside suppliers.
Process decisions are concerned with the proper mix of human skills and equipments needed to produce
the parts in-house and which part of the processes are to be performed by each equipment and worker.
Process decisions must be made when :
A new modified product or service is being offered
Quality must be improved
Competitive priorities have changed
Demand for a product or service is changing
Cost or availability of materials has changed
Competitors are doing better by using new technology or a new process
Process Decisions
Five common process decisions considered by production/ operations managers are :
I. Process choice : determines whether resources are organized around products or processes in order
to implement the flow strategy. It depends on the volumes and degree of customization to be
provided.
II. Vertical integration : is the degree to which a firm’s own production system handles the entire
supply chain starting from the procurement of raw materials to distribution of finished goods.
III. Resource flexibility : is the ease with which equipments and workers can handle a wide variety of
products, levels of outputs , duties and functions.
IV. Customer involvement: refers to the ways in which customers become part of the production
process and the extent of their participation.
V. Capital intensity: is the mix of equipments and human skills in a production process. Capital
intensity will be high if the relative cost of equipment is high when compared to the cost of human
labour.
Process Choices
The major process choices are discussed :
I. Job-shop process: It is used when low volume, high –variety goods are needed. Processing is
intermittent , each job requires somewhat processing requirements. A job-shop is characterised
by high customisation (made to order) , high flexibility of equipment and skilled labour and low
volume. A tool and die shop is an example where job process is used to produce one kind of
tools. Companies having job-shops can carry out work for other firms.
II. Batch Process: Batch processing is used when moderate volume of goods and services is
required and also a moderate variety in products and services. A batch process differs from the
job process with respect to volume and variety. In batch processing , volumes are higher because
same or similar products or services are produced repeatedly , provided examples of products
produced in batches include paint, ice-cream , soft drinks , drinks and magazines.
Process Choices
The major process choices are discussed :
I. Repetitive Process: Used when higher volumes of more standardised goods or services are needed.
This type of process is characterised by slight flexibility of equipment (as products are standardized)
and generally low labour skills. Products produced include automobiles , home appliances television
sets , computers , toys etc. Repetitive process is also is also referred to as line process as it include
production lines and assembly lines in mass production. Resources are organized around a product or
service and materials move in a line flow from one operation to the next according to a fixed
sequence with little work-in progress inventory. Manufacture-to-stock, assemble-to-order and mass
customisation.
II. Continuous Process: This is used when a very highly standardised product is desired in high
volumes. These systems have almost no variety in output and hence there is no need for equipment
flexilibility. A continuous process is the extreme end of high volume, standardised production with
rigid line flows. The process is often capital intensive , operate round the clock to maximize
equipment utilization and to avoid expensive shut downs and shut ups . Example petroleum products,
steel, sugar paper, cement etc.
Process Choices
Project Process: It is characterised by high degree of job customization , the large scope of each
project and need for substantial resources to complete the project. Examples of projects are building
a shopping centre , a dam, a bridge , hospital etc. Projects tend to be complex , take a long time and
consist of a large number of complex activities.
Vertical Integration
Vertical Integration: Vertical integration is the amount of production and distribution chain, from
suppliers of components to the delivery or products/ services to customers, which is brought under
the ownership of a firm.
 The management decides the level of degree of integration by considering all the activities
performed from the acquisition of raw materials to the delivery of finished products to customers.
When managers to have more vertical integration there is less outsourcing.
The vertical integration is based on make-or-buy decisions. Make decisions ensures meaning more
integration and buy decisions meaning less integration.
Vertical integration is (i) Backward integration : represents moving upstream towards the source
of raw materials and parts for example steel mill owns iron ore and coal mines. (ii) Forward
integration : in which the firm acquires the channel distribution (such as having own warehouses
and retail outlets)
Vertical Integration
ADVANTAGES DISADVANTAGES
Can sometimes increase market share and allow Not attractive for low volumes.
the firm enter foreign markets more easily.
High capital investment and operating costs.
Can achieve savings in production cost and
produce higher quality goods. Less ability to react more quickly to changes in
customer demands , competitive actions and new
Can achieve more timely delivery techniques.
Better utilization of resources
Process Decisions Contd.
RESOURCE FLEXIBILITY CUSTOMER INVOLVEMENT
The choice that management makes concerning It is the extent to which customers interact with
competitive priorities determine the degree of the process.
flexibility required of a firm’s resources – its
employees , facilities and equipment . A firm which competes on customization
allows customers to come up with their own
Production managers must decide whether to product specification or even become involved
have flexible workforce which will provide in the designing process for the product (quality
reliable customer service and avoid capacity function deployment approach to design for
bottlenecks. incorporating the voice of the customer).
Flexible workforce is useful with flexible flow
strategy to even out fluctuating work loads.
Process Decisions Contd.
Capital intensity: Means the predominant resource used in manufacturing, i.e. capital equipments
and machines rather than labour. Decision regarding the amount of capital investment needed for
equipment and machines is important for the design of new process. One advantage is increase in
product quality and productivity and on big disadvantage may be high investment cost low-volume
operations.
Comparison between Processes
Types of Processes
https://www.youtube.com/watch?v=YEJzW8rsIzo
Comparison
between
Processes
Case : National Cranberry Case
Cranberry Processing
https://www.youtube.com/watch?v=JNDG4iw5FY4
Case : Toshiba Ome Works
Case: Assembly Line (HBR)
Production Design
Production Design: The design of products and services is partially dependent on the production
system design and vice versa. A product or service designed in one way may be costly to produce,
but it may be somewhat less costly when designed another way. The designing of products from the
point of view of producibility is known as production design.
The producibilty and minimum possible production cost of a product are established originally by
the product designer and the process technology, process design and selection of the productive
system are governed by the limitations of the product design. Hence the basic modes of production
for products are thought of in the product design stage itself. This conscious effort to design for
producibility and low manufacturing costs are referred to as production design.
Comparison Between Production
Processes
Comparison between Project, Job-shop, Batch Production, Continuous Flow Production.
https://www.youtube.com/watch?v=YEJzW8rsIzo
Business Information Flow
© WILEY 2010 85
OM Decisions
© WILEY 2010 86

Module 2 Production Systems

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Module 2 Production Systems

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Course:

Storage of goods as inverted triangles

The capacity is the maximum output rate.

Step Description Run Time

Note : Capacity is an 1 Cutting 12.5 192

2400 𝑚𝑖𝑛𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘

= 28.4 𝑏𝑎𝑡𝑐ℎ𝑒𝑠 𝑝𝑒𝑟 𝑤𝑒𝑒𝑘

= 16.9 𝑚𝑖𝑛𝑠. 𝑝𝑒𝑟 𝑠ℎ𝑖𝑟𝑡

1 Cutting 12.5 22 142 16.9

2 Sewing (base) 12 0 200 12

3 Sewing (extras) 13 0 185 13

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